Card firms up easy-pay services
KEB Hana Card on Monday announced it will launch a one-stop payment service by the end of this month that only requires users to scan their fingerprints for few seconds when paying with a mobile credit card. It is the first Korean card payment service that allows for verification through a biometric technology.
The new function will be added on the card company’s existing mobile card app Mobi Pay, which currently requires users to use passwords and the state-run self-verification module, which requires the installation of the notorious Active-X plug-in.
“We hope to enhance users’ payment experiences with the new technology that makes the payment process more secure and convenient,” said Hong Pil-tae, head of new business division at KEB Hana Card. “We’ll keep working on strengthening financial information security by implementing other biometric self-authentication processes, such as iris and vein scanning as well as facial recognition.”
Hyundai Card also recently launched a new service called PayShot, which only requires a cardholder to input their Hyundai membership ID and password during their very first purchase on an online mall, keeping the information saved for subsequent purchases.
The service is compatible with major online open markets, ranging from 11st, Auction and G Market to the online shops of offline retailers like CJ, Lotte and Shinsegae, using the card company’s vast membership network.
Such moves are part of the credit card industry’s attempt to keep their lead in the payment market as new rivals like mobile device makers, mobile service operators and telecom carriers are moving aggressively to expand their customer base.
Naver and Kakao, which have jumped into the mobile and online payment market since last year, have recently introduced a plastic check card by collaborating with Shinhan Card, the No. 1 player in the conventional card industry.
LG Electronics is currently working on its own payment service for its new smartphones by collaborating with Shinhan and KB Kookmin Card. The so-called LG Pay reportedly involves the use of a plastic card that can carry multiple digital cards, allowing a user to switch between them and make payments at all regular credit card readers.
But experts say credit card companies should focus on coming up with special perks for their customers instead of simply collaborating with IT giants or investing in developing their own easy-pay services.
“Card companies are introducing their own similar easy-pay systems, but they can never win against IT giants in terms of the number of users,” said Yoon Jong-moon, a researcher at the Credit Finance Research Institute. “The companies should develop their own customer strategy instead of simply relying on fees generated from cooperating with IT giants.
Samsung Electronics, Naver and Kakao already control more than half of the easy-pay market by number of users because those with Galaxy smartphone or who use the platforms are inclined to choose the most easily accessible easy-pay service, according to Yoon.
“However, the card companies have substantially larger numbers of retail shops in their membership networks, so they have time to keep existing customers by offering differentiated membership benefits,” Yoon said. “Otherwise, at the end of the day, the card companies will lose their hegemony in the market.”
As competition has gotten fiercer, the local easy-pay market has grown sharply to about 6 trillion won ($5.23 billion) as of last year, from 1.13 trillion won as of the first quarter 2013, according to Statistics Korea.
BY KIM JI-YOON [email@example.com]
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